New HESTA modelling reveals impact of paying super on paid parental leave
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New HESTA modelling reveals the impact of paying super on paid parental leave as support grows for key retirement equity measures for women.
Prominent industry groups have joined HESTA in backing the intention for super to be paid on
Commonwealth Paid Parental Leave, with new HESTA data revealing the impact this key reform could have on its members’ retirement balances.
Leading organisations from the business, health, aged care and community services sectors, including Chief Executive Women, Early Childhood Education Australia and the Australian Nursing and Midwifery Federation, are among the growing coalition of 18 organisations that with HESTA are advocating for the retirement equity measure, which could result in a mother of two having $14,000 more at retirement.
“Parental leave continues to be one of the few types of leave yet to attract superannuation. Extending the superannuation guarantee to paid parental leave is a critical lever for closing the gender gap in superannuation and improving women’s economic security across their lifetime.” said Non-Executive Director of Chief Executive Women Pauline Vamos.
The new modelling has also shown that the policy change could mean as much as 4.5% in additional super savings for an early childhood educator with three children, or 2.6% more for aged care professionals with two children. This could be a life-changing amount for women on lower incomes.
“Every extra dollar our members can add to their super can really make a difference when they retire,” said HESTA CEO Debby Blakey.
Blakey also said that paying super on Commonwealth Paid Parental Leave payments is an important equity measure that could make a real difference for women. More than 80% of the Fund’s 950,000-strong membership base are women, with many typically low and middle-income earners.
“This policy change will give women’s retirement savings a much-needed boost, helping to close the gender super gap, as women are currently much more likely to be the ones taking parental leave.”
The $68 billion industry super fund earlier this year found nine in 10 of more than 2300 members surveyed strongly agreed that changes to Australia’s super system were needed to improve women’s financial security in retirement.
Menchie Khairuddin is a writer Deputy Content Manager at Akolade and content producer for Third Sector News. She is passionate about social affairs specifically in mixed, multicultural heritage and not-for-profit organisations.
